TaxTMI 
TaxTMI 
2026 (6) TMI 86
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.... 3. The Ld. CIT(A) has erred in law and on facts in confirming addition of Rs. 44,21,768/- under the head "Long Term Capital Gain" despite the fact that the land sold was agricultural land and not a "capital asset" within the meaning of section 2(14) of the Act. 4. The Ld. CIT(A) has erred in law and on facts in upholding application of section 50C by reverse calculation of jantri value. 5. The Ld. CIT(A) has erred in law and on facts in confirming addition of Rs. 22,08,333/- under section 69A of the Act being alleged cash receipt, without any corroborative evidence and solely relying upon third-party statements and documents, which were never confronted to the appellant, thereby denying opportunity of cross-examination. 6. The appellant craves leave to add, alter, amend, or modify any of the above grounds at the time of hearing." 3. The brief facts of the case are that the assessee is an individual who filed return of income under section 139(1) of the Income-tax Act, 1961 ("the Act") for Assessment Year 2019-20 on 23.10.2019 declaring total income of Rs. 1,13,410/-. Subsequently, the case of the assessee was reopened under section 147 of the....
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.... rates applicable for agricultural and commercial lands in Dholi village and came to the conclusion that the stamp valuation adopted by the Sub-Registrar indicated that the land was treated as non-agricultural/commercial land for stamp duty purposes. Proceeding on such reasoning, the Assessing Officer held that the land constituted a "capital asset" within the meaning of section 2(14) of the Act and accordingly invoked section 50C of the Act by adopting stamp duty valuation of Rs. 1,32,65,306/- as deemed sale consideration. Since the assessee held 1/3rd share in the property, the Assessing Officer computed long-term capital gain of Rs. 44,21,768/- in the hands of the assessee. The Assessing Officer also observed that no documentary evidence regarding cost of acquisition was furnished and therefore cost was effectively taken at nil for computation purposes. Penalty proceedings under section 270A of the Act were also initiated by the Assessing Officer for alleged under-reporting and misreporting of income. 6. Apart from the above addition, the Assessing Officer also made separate addition of Rs. 22,08,333/- under section 69A read with section 115BBE of the Act on account of allege....
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....r, the additions of Rs. 44,21,768/- on account of long-term capital gain and Rs. 22,08,333/- under section 69A read with section 115BBE of the Act were confirmed. With regard to Grounds No.4 and 5 relating to non-supply of incriminating material and statements relied upon by the Assessing Officer, the Ld. CIT(A) observed that two show-cause notices dated 12.03.2024 and 26.03.2024 had been issued during assessment proceedings and according to CIT(Appeals), relevant extracts of seized material and statement of Shri Kailashnath Upadhyay had already been reproduced in the assessment order. Since the assessee failed to produce any evidence to establish otherwise, the Ld. CIT(A) dismissed these grounds and held that adequate opportunity had been granted during assessment proceedings. 10. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 11. We have heard the rival contentions and perused the material on record. 12. Ground No.1 raised by the assessee relates to dismissal of appeal by the Ld. CIT(A) ex-parte without appreciating the reasons for nonappearance. The same is general in nature and does not call for separ....
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....ion has been accepted. It has specifically been pointed out that in the case of co-owner Harshadbhai Patel, the issue relating to distance from nearest municipality was duly examined by the Department and thereafter the land was accepted as agricultural land not falling within the definition of "capital asset" under section 2(14) of the Act. Once the Revenue itself has accepted identical land as agricultural land in the hands of co-owners arising from the same transaction, there cannot be different treatment in the hands of the present assessee in absence of distinguishing facts. 17. We further find that the Assessing Officer has merely proceeded on presumptions arising from the fact that the purchaser was a company and that subsequently permission under section 63AA of the Gujarat Tenancy and Agricultural Lands Laws (Amendment) Act may have been sought by purchaser for industrial use. However, future intended use by purchaser cannot determine the nature of land on the date of transfer. The relevant consideration under section 2(14) of the Act is the character and location of land on the date of sale. Merely because agricultural land is sold to a non-agriculturist or company doe....
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....t, being land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer." 23. A plain reading of the above provision makes it abundantly clear that section 50C of the Act applies only where the asset transferred is "capital asset". Once we have already held while adjudicating Ground No.3 that the land sold by the assessee was agricultural land outside the scope of "capital asset" under section 2(14) of the Act, the deeming fiction contained in section 50C automatically becomes inapplicable. 24. Apart from the above, we also find merit in the contention advanced by the assessee that the Assessing Officer adopted stamp valuation merely on reverse calculation basis without any direct reference from the stamp authority. The assessee has also demonstrated that the purchaser had sought permission under section 63AA of Gujarat Tenancy and Agricultural Lands Laws for industrial use and therefore enhanced stamp duty valuation wa....